S.H.KAPADIA, J. - (1.) IN this batch of matters, the central question which we are called upon to decide is regarding the validity of Policy Circular dated 30.8.05 and Notification No.24 dated 31.8.05 which has the effect of amending para 6.8(a) and para 6.8(h) of the Foreign Trade Policy 2004-2009. "This judgment is confined to Domestic Tariff Area sales (DTA sales) by 100% Export Oriented Unit (EOU). Leave granted in special leave petitions filed by Union of INdia against various EOUs. The basic issue which we need to decide in this batch of cases is: whether DTA sales by 100% EOUs form an integral part of EOU Scheme"
(2.) FOR the sake of convenience we reproduce hereinbelow the facts as reproduced in the case of Union of India and others v. M/s. Abhishek Exports [Civil Appeal No of 2007 arising out of S.L.P. (C) No.(CC9879 of 2006)]. The concept of EOU was introduced in 1980 in the EXIM Policy. The EOU Scheme was framed in order to boost the Indian exports. Under the said Scheme, EOU could be located at any place. In 1992, statutory recognition was given to EXIM Policy vide Section 5 of the Foreign Trade (Development and Regulation) Act, 1992. In 1991, EOU was permitted to sell rejects upto 5% and goods in the DTA after obtaining permission from the Export Commissioner. In 1997, under EXIM Policy 1997-2002, EOU was permitted to sell rejects as well as goods upto 50% of the FOB Value of exports subject to payment of duty and fulfillment of minimum Net Foreign Exchange Earnings (NFE). Over and above this limit, EOU could sell finished products which were freely importable against payment of full duty. On 24.3.2000 M/s. Abhishek Exports was granted the Letter of Permission (LOP) by the Development Commissioner, NOIDA, to manufacture and export marble tiles and finished marble blocks. In the LOP it was stipulated that M/s. Abhishek Exports had to maintain NFE percentage and they were required to achieve minimum Export Obligations. In the said LOP it was further stipulated that M/s. Abhishek Exports cold make domestic sales as per the provisions of EXIM Policy 1997-2002.
(3.) M/s. Abhishek Exports started exporting finished marble made out of rough imported marble and rough indigenous marble. The rough marble so imported was duty-free. Under the LOP, M/s. Abhishek Exports had the right to make sales in DTA, subject to payment of concessional and full duty as the case may be. On 1.4.04 FTP 2004-2009 came into force. We quote herein below paras 6.1, 6.5, 6.8(a), 6.8(b), 6.8(d), 6.8(e), 6.8(g) and 6.8(h) of the FTP 2004-2009 which read as under: JUDGEMENT_645_TLPRE0_2007Html1.htm ;